Program Design and Budgets

Why Good Program Design Is Important

The multifamily affordable housing sector is full of untapped energy potential. Buildings are frequently in need of efficiency repairs and improvements that when carried out provide reliable energy savings. However, the multifamily affordable housing sector has long presented challenges for efficiency programs because it defies categories and involves numerous interested parties, making it hard to reach.

To be effective, utility programs must be carefully crafted and tailored to meet the unique needs of the multifamily affordable sector. Developing and implementing well-designed programs targeted to the multifamily affordable housing sector can help utilities meet their energy efficiency goals, maintain affordable housing, and create healthier living environments for residents.

Our priorities for Good Program Design

Make capturing all potential cost-effective efficiencies the goal. To obtain adequate funding, program administrators should assess the total multifamily affordable housing energy efficiency potential of a targeted locale.

Assure coordination among utility programs – electricity, gas and water – and count savings from multiple fuels and water. Create a framework that allows the lead utility to capture the savings from all energy fuels and water, or to apportion the costs and benefits to the appropriate utility.

Assure that cost-effectiveness tests work for multifamily affordable housing. Account for non-energy benefits and apply cost-effectiveness tests at the portfolio level.

Develop programs specifically targeted to multifamily affordable housing. Programs should be further tailored to meet the needs of multifamily affordable housing sub-sectors, such as master-metered buildings, subsidized housing, and high-use customers.

Structure incentives for whole-building savings. Tie incentives to the total amount of energy savings produced. Prescriptive incentives, such as contributions to lighting projects, can be useful but should not be the primary approach for large projects because they generally do not achieve comprehensive energy savings.

Support a “one-stop shop” where building owners can get access to integrated program services. The one-stop shop should act as a resource to link building owners to lenders, contractors, utility staff, and others without becoming a gatekeeper.

Examples of Good Program Design

The American Council for an Energy-Efficient Economy (ACEEE) has identified the following programs as exhibiting best practices in program design for achieving energy savings in multifamily buildings:[1]

Puget Sound Energy (Washington state) – Puget Sound Energy provides rebates and energy and water audits in collaboration with the Saving Water Partnership, an alliance of the Seattle and King County water utilities.

Multifamily Performance Program (New York) – The Multifamily Performance Program provides per-unit incentives as well as low-cost financing for new construction and retrofits of existing multifamily buildings that achieve 15 percent energy savings from electric and gas. A member of the New York State Energy Research and Development Authority’s network of service providers performs an energy audit and creates an energy reduction plan to identify how to achieve the 15 percent target. Escalating performance incentives are paid to owners for achieving savings over 20 percent.

Energy Savers (Chicago) – Energy Savers is an energy retrofit program of Elevate Energy and the Community Investment Corporation targeting existing mid- to-low-income, affordable, and subsidized properties in the Chicago area. The program draws on a mix of funding sources including Illinois utilities; state, local, and federal governments; and foundations to provide property owners comprehensive energy retrofits.

EEFA commissioned this study to estimate the potential energy savings from the implementation of efficiency measures in affordable multifamily housing in nine states — Georgia, Illinois, Maryland, Michigan, Missouri, New York, North Carolina,